Real Estate Glossary
With all of the phrases and expressions that are used in the property space, it’s easy to feel a bit confused. Here we have compiled a helpful glossary of some of the most commonly used real estate terms from the Real Estate Institute of Australia (REIA), Domain, and Home Loan Experts.
Agent: A person authorised to act for another (usually for the owner) in the selling, buying, renting or management of a property. Commonly used to refer to licensed real estate agents and real estate representatives.
Allotment: An area of land sufficient for building a house. Also referred to as a block of land, lot, or homesite.
Amenities: A feature or facility that adds to the lifestyle satisfaction of living in a particular property (e.g. nearby restaurants and transport).
Building Inspector: An authorised person who is responsible for checking completed buildings, and buildings during the course of construction, to ensure that they have been constructed in accordance with building control provisions.
Building permits: A permit issued by Local Government Authorities for the erection or structural alterations of all structures.
Building regulations: The Building Code of Australia and other regulations stipulated by local authorities relating to the design and construction of buildings. They are designed to ensure public safety, health and the minimum acceptable standards for design, construction, alteration, repair and occupancy. Also referred to as Building By-Laws and Building Code.
Building restriction: Laws designed by local government authorities to limit the use, size and location of buildings or other improvements on land.
Building surveyor: A person who is registered and qualified to issue a building permit, inspect for compliance with the Building Act and Building Regulations and issue an Occupancy Permit or Certificate of Final Inspection.
Conditions of Sale: The conditions applicable to a sale contract made between a vendor and purchaser.
Contract of Sale: An agreement relating to the sale of property, which expresses the terms and conditions of sale.
Conveyance: A deed which transfers ownership of common law title from one person to another.
Conveyancer: A solicitor who specialises in the property law of conveyancing. They are a licensed professional who ensures you meet all the legal obligations involved in your property transaction, including the settlement and title transfer process.
Cooling Off Period: The time period given to a buyer after the exchange of contracts, where they can consider their impending property purchase and potentially withdraw their offer without legal repercussions. The period is only for properties sold by private treaty (not auction).
Deposit: A (generally) non-refundable percentage (usually ten per cent) of the purchase price paid by the buyer when the contracts are signed and exchanged. The deposit must be held by an estate agency or seller’s solicitor in a trust account, or held jointly in a trust account by seller and buyer.
Display Home: A building which represents a dwelling and is intended to be open to the public for inspection, for the purpose of marketing services for a particular builder or building company. A display home is generally located adjacent to new housing estates or on a main roadway.
Easement: A right to use the land of another (not involving the taking of any part of the natural produce of that land, or any part of its soil) or a right to prevent the owner of that land from using that land in a particular manner. Most commonly used where Government authorities have the right to run, for example, electrical mains or drainage through private property. Some form of compensation may be payable.
Encumbrance: A charge or liability on a property; for example, a mortgage or a special condition on the use to which it may be put (e.g. easements, restrictions and reservations).
EOI: Short for ‘Expressions of Interest’, this is when an agent asks buyers to register their interest on a home before a certain time.
Exchange of Contract: The legally binding part of the sale process, where two contracts are drawn up and signed by each party, and then exchanged so the buyer has the contract with the vendor’s signature and vice versa. A deposit is usually paid at this time.
Fittings: Installed items that may be removed from real estate without causing irreparable damage to the land, structure or use of the premises.
Fixtures: Parts of a property that are affixed to structures or land, usually in such a manner that they cannot be independently moved without damage to themselves or the property that is housing, supporting or pertinent to them.
Floor Area: Total horizontal surface of a specific floor, or the total area of all floors in a multi-storey building, computed from the outside building dimensions of each floor. Balconies and mezzanine floor areas are calculated separately and added to the total floor area of the building.
Grace Period: A period when a mortgage payment or other debt becomes past due, and before it goes into default. Most mortgages provide for a specified period of time when it can be paid without penalty or default.
Guarantor: The person liable to pay your loan if you default on your mortgage.
Homesite: See Allotment.
Landscaping: The work of the landscape architect, landscape gardener or landscaper; treatment of lawn and plantings to enhance the appearance of a lot.
Lenders Mortgage Insurance (LMI): A non-refundable, one-off fee added to your home loan in an instance where you’re wanting to borrow more than 80 percent of your home’s value. It protects the lender against higher-risk borrowers.
Mortgage: A type of loan where real estate is used as the collateral. It allows the borrower to buy property or land, and is a written and binding contract that provides security to the lender.
Mortgage Broker: A person who acts as an intermediary between buyer and lender, comparing loans from different institutions to provide a range of suitable options for the purchaser.
Ownership: The right to possess and use property to the exclusion of others.
Pre-Approval: Also known as conditional approval, this is when a lender has agreed to loan you a particular amount in principle, but nothing has proceeded to final approval. Pre-approval lets you know how much you have to bid or offer on a home.
Premises: A house, building or other structure together with the surrounding grounds that form part of the title. Also, the real estate forming the subject of a conveyance or licence.
Private Treaty: A sale negotiated directly between the parties or their agents.
Purchaser: The buyer. The one who acquires the title to a property or an interest therein.
Real Estate Agent: See Agent.
Settlement Date: The date when the property sale is finalised and the buyer becomes the official owner of the property.
Stamp Duty: Also known as transfer duty, this is a government tax applied to transfers of property and mortgages. Calculated as a percentage of the contract value, stamp duty varies from state to state, and discounts are available for certain parties, including first-home buyers.
Sub-division: Literally a division into parts. This term is generally used in the sense of dividing land into building lots. Before the subdivided land can be sold, it must be approved by the council, other statutory authorities and the Titles Office, as appropriate.
Title Deed: Documents evidencing the ownership of property that are transferred to the new owner when the property is sold.
Trust Account: A separate bank account managed by a real estate agent where funds (such as deposits and rental income) are held on behalf of another party.
Unencumbered Property: Property free and clear of mortgages, restrictive covenants, leases and assessments of any kind.
Valuation: A written assessment of how much a property is worth, made by a registered valuer.
Vendor: One who sells anything. In real estate transactions, the person(s) or entity selling the property.
Zoning: Local planning authorities control the present and future development of land, including residential, business and industrial uses.